November 2012
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In this issue

Achieving Success

A client acquired a company that had not historically reported unclaimed property to the States. The client engaged Moyer & Osibodu to determine what, if any, potential unclaimed property exposure existed at the acquired company. Read More


Guest Contribution

The insurance industry has been the target of various state enforcement activities within the last few years and the resulting settlement agreements are for millions of dollars. We’re pleased to present the contribution (“5 Steps Insurance Companies Need to Take Now for Death Matching Compliance”) from one of our business partners, Thomas J. Berger, Chief Executive Officer of Cross Country Computer based in Central Islip, New York.

5 steps Insurance Companies Need to Take Now for “Death” Matching Compliance

With recent state mandates and audits on the rise, the following steps will help insurance companies who want to ensure compliance with the States’ Social Security Administration Death Master File (SSA DMF) matching requirements, also known as the “death” matching requirements.

1. Assign an Internal Champion and Get Informed - Each company needs a dedicated project manager who “owns” compliance with the death matching regulations. Empower this advocate to reach across different groups and business lines within your company so that they can leverage the appropriate resources as needed. They will need access to a team, with representation from each Line of Business (LOB) including operations, claims, technology, legal and eventually procurement. Once the team is in place, it is time to start the research process. Obtain copies of all recent legislation including those from New York, Alabama, Maryland and Kentucky. You should also follow announcements from the National Conference of Insurance Legislators (NCOIL) and other industry groups. Carefully review all of the publically available Global Resolution Agreements (GRA) and Regulatory Settlement Agreements (RSA) (see States’ settlements with John Hancock, MetLife, Prudential, etc.). For example, the requirements in the NY Reg-200 were directly drawn from these documents. This information will provide a terrific road-map as to the logic needed for your compliance.

2. Develop a Project Plan - Each project plan should include the identification of key stakeholders, information gathering on each LOB, the evaluation as to whether to outsource processing, as well as instituting a plan for ongoing compliance as rules continue to change. Include your deadline for when you must have a solution in place while allowing a buffer for the inevitable delays that may occur throughout the process.

3. Interview Key Stakeholders and Consult Legal Counsel! - Since there is a great deal of ambiguity in the different requirements, it is important to get legal counsel involved with this effort from the start. Begin with a thorough interpretation of each regulation. Speak to decision makers overseeing each LOB and find out what they have done in the past and what they are doing today. What current processes and procedures do they have in place? Do they proactively conduct research to see if existing annuitants or insureds are deceased? Are any of your groups already licensing and using the SSA DMF? If so, how is it being used? Take nothing for granted. Don’t assume that because someone is using a given vendor or a particular tool that it means they are in compliance. Most likely they are not. Review the findings from these internal meetings with counsel to determine where state regulations are being met and where they are not.

4. Know Thy Data - The age of insurance policies and the disparate source systems they have maintained over the years often leaves data in poor condition. This is further complicated by decades of acquisitions and software migrations. Most solutions designed to match your data to the SSA DMF assume a clean, complete and well formatted input file. The reality is that this is not usually the case and therefore these traditional approaches are destined to fail. Know Thy Data! How many records do you have? What percentage of each field is missing data? How many policies are missing Social Security Numbers (SSNs) or have calculated Dates of Birth? Are there mixed format issues with name and date fields, etc.? An in-house assessment is required to answer these questions and prepare for the processing phase.

5. Get Outside Input - Even if the ultimate goal is to perform the processing in-house, it is prudent to develop a formal RFP as a precursor, which will help organize your approach and ensure that you are thinking about all of the crucial decision points. This will help ensure that your ultimate provider – internal or external – fully understands and is committed to meeting all requirements. If you are not sure which regulation you need to comply with, specify one of the recent RSAs as a baseline in your RFP for required fuzzy matching and then request that providers clearly delineate how they will address this logic. Ask if their solution has been fully tested and ask for verification. Will the provider have the flexibility to evolve as new legislation is introduced? What is their prior experience and do they understand the insurance vertical? What, if any, volume or frequency of processing constraints exists? Legal should review and sign-off on any RFP prior to issuance. Request an initial test pilot from the provider to assist with the decision making process. This is an excellent way to experience and evaluate a provider’s processing capabilities.

The best thing insurance companies can do is to start their process review as soon as possible. The States are becoming more aggressive and each step taken will get your company closer to where it needs to be. To learn more about a solution for the “death” matching compliance requirements, Visit

Update from the AICP Conference

Last month I had the opportunity to speak at the Association of Insurance Compliance Professionals (AICP) annual conference in San Antonio, Texas. Recent headlines have given the reputation of the insurance industry a big black eye. Whether the negative headlines were deserved or not will continue to be a topic of discussion for months. However, a concern I heard voiced by the attendees again and again was the level of effort required to perform the Social Security Death Master File (SSDMF) matches required by the states. Read more

Do You Have a Process For Reporting Your Unclaimed Escrow Balances?

Each state has different rules, but one thing is consistent throughout all the U.S., companies must report their unclaimed escrow balances to the state, each year. With all the news focusing on the life insurance industry, we want to use this opportunity to discuss another unclaimed property issue inherent in the insurance industry, specifically title Insurance. With the collapse of the real estate market during the last few years, escrow balances could have remained outstanding for various reasons and subsequently due for reporting to the states as unclaimed property. Many title insurance companies are in the dark when it comes to understanding the States’ Unclaimed Property laws. Read more

Josiah S. Osibodu, CPA
Managing Partner - Consulting Services
Kathleen H. Moyer
Managing Partner - Compliance Services
Cell: 609.412.0866